Market Overview

September’s US employment report was almost the cleanest dovish combination markets could have received. Payrolls rose just 29K against a 90K consensus, unemployment edged up to 4.2%, wages undershot and prior months were revised lower again. Treasury yields fell, October Fed hike expectations collapsed into the low teens and the Dollar Index was knocked back below 102.

Dollar Index is heading towards the 102.77–103.00 resistance zone while Silver stabilizes near 60 after falling from 71.16—the two markets are trading the same macro bet from opposite sides, and September's NFP report, including the wage component, could resolve both in the same session.

The OAT-Bund spread widened past 140.6bp, its widest since the 2012 eurozone debt crisis, as French 10-year yields surged to 4.935% while German Bund yields fell to 3.529%—a divergence pointing to a France-specific sovereign risk premium that EUR/CHF is now starting to transmit into FX.

Q4 opened as a continuation of Q3. Global sovereign bonds extended their selloff, the US 10-year Treasury yield rose to around 5.34%, the Dollar pushed higher after a sixth consecutive quarterly gain, and EUR/USD broke below 1.13. This came even though softer August PCE inflation had already reduced conviction in another Fed hike in October.

Gold's rebound from 4,110.50 nearly tested the 4,113.82 Fibonacci projection to the tick, preserving the corrective interpretation of the decline from 4,697.07, but the 10-year Treasury yield stayed pinned near 5.30% despite softer PCE inflation—leaving 4,234.68 and 4,334.57 as the two resistance levels bulls still need to clear.

Sterling rallied, Dollar fell and Aussie fell even harder. The difference was not the data alone, but where each central bank already stood before the numbers arrived.

Sterling's rally started before today's stronger UK GDP data—markets now price an 89.2% probability of a November BoE hike and a terminal rate near 4.86%, with GDP confirming the hawkish repricing already underway rather than triggering it.

EUR/JPY and AUD/JPY have broken key technical support this week, but the weekly performance breakdown shows only 0.1–0.3 percentage points of that weakness comes from genuine Yen strength—the rest reflects Dollar and Yen as the two strongest majors, with intervention risk capping USD/JPY and forcing Euro, Aussie, Sterling and Kiwi weakness to pass directly into their Yen crosses.

DXY has reached 101.30 and is testing 101.63–101.80 resistance near a two-month high, but the rally's momentum is flattening as two of its immediate tailwinds fade, the 10-year Treasury yield has retreated after testing the 5.24% area Monday, and oil has also pulled back. Neither move reverses the broader inflation-and-rates story, but both remove the marginal support that had been pushing Fed expectations and the Dollar higher.

Gold and Silver both sold off as the U.S. 10-year yield surged to a fresh multi-decade high near 5.232%, but BMO Capital Markets’ new long-term forecasts show Silver trading nearly 30% above its structural anchor of $47, versus Gold sitting just 4% above its $4,000 anchor—leaving Silver far more exposed to a premium unwind.

The RBA raised rates 25bp to 4.60% unanimously with hawkish statement language, yet AUD/USD reversed sharply after Governor Michele Bullock said further tightening was merely a “hope” rather than a base case, breaking the 0.7000 support zone within the hour.

Yen surged broadly Monday, pushing USD/JPY through 157, after Japan's Vice Finance Minister Atsushi Mimura sharpened Tokyo's intervention warning, saying markets should take the coordinated Japan-US message on Yen weakness "at face value.

Bitcoin may have completed a five-wave advance at 87,354, with 85,131.78 the pivot that decides whether the correction starts—but a pullback toward the 75,000–76,000 base could leave the broader rise intact and keep 100,000 in play.

Gold broke below 4,200 on Monday after taking out 4,234.68 and the 61.8% retracement at 4,230.70, turning a persistent oil-to-rates headwind into technical damage. 4,113.82 is the next momentum test, and 3,937.19–3,942.43 is the larger structural verdict.

The Dollar Index closed near 101.03 after a hawkish Fed-driven rally, but it’s now approaching genuine resistance at 101.80–102.86 rather than emerging from support—clearing that zone likely requires the 10-year Treasury yield, not the already-stretched 2-year, to extend further.

Today's themes: Dollar: gave back part of this week's yield-driven rally, weaker against EUR, JPY, GBP, CHF, AUD and NZD (CAD the exception), but still on track for its first back-to-back weekly gain in more than three months as elevated Fed hike expectations and Treasury yields largely hold, a...

The Australian Dollar is the week’s worst-performing major currency even with a September RBA hike to 4.60% essentially fully priced—the weakness reflects position lightening ahead of uncertain vote composition and guidance, not doubt about the hike itself, with AUD/USD now testing 0.7006 support.

Gold has held its 4,230.70 support through a sharp Treasury yield surge to multi-decade highs, but the real test isn’t whether it can absorb a short-lived spike—it’s whether that support survives a sustained regime with the 10-year yield staying above 5%.

Dollar strengthened against every major currency Thursday as three drivers moved together: October Fed hike odds surged to 77.5%, from roughly 53% a day earlier and under 10% a month ago, pushing the 10-year Treasury yield to around 5.14%, its highest since 2007; Brent extended its rally above $105 as Houthi forces advanced toward the Bab el-Mandeb corridor, opening a second oil chokepoint alongside Hormuz; and the US and China extended their trade truce by only two months, to January 10, rather than locking in a more durable reset.

October Fed hike odds have surged to 69.7% on a booming flash PMI, driving the 2-year and 10-year Treasury yields to fresh multi-year highs—and pushing EUR/USD toward a structural decision zone at 1.1323–1.1353.